The need for respect
Ask anyone about the Intellectual Property Rights (IPRs) and the possibility is that you will get an extremely vague reply that it somehow protects the interest of the writers / artistes and patent holders.
While many would proudly say that they know it exists, the majority, with the exception of handful of experts in highly legalistic circles, would confess that they don’t understand how it affects them. Still fewer would shrug-off suggestions that making a copy of a movie on video tape and songs on audio tapes, photocopying of a book or a photograph, constitute an infringement of IPRs.
In the recent decade the ripples of demand for the protection of IPRs on the international forum, such as the United Nations, have also been felt in Pakistan. Many know that IPRs exist but few know how it affects them.
While the concept of IPRs is relatively new, in reality it is only an extension of the much known, but less understood copyright, protection. The need for the adaptation of the universal protection of IPRs now includes many more activities as compared to its predecessor. Today it includes not only the traditional literary, artistic and musical materials but also the protection of an idea which in the past was an unheard concept, software development, industrial property particularly textile-related.
Two main objectives of the IPRs is to promote respect for intellectual property including industrial property and copyrights on one hand and to promote its protection around the world through international cooperation by amending national laws.
The stress on IPRs and its widespread global acceptance has resulted into increased filing of requests for patents, trademarks and industrial designs to protect the interests of creative people across the globe in various fields be it literary, artistic, musical, software or publishing, etc.
Today, there are over four million patents existing in the world while over one million industrial designs are currently registered. By the end of year 1995, over one million trade marks had been registered globally.
Little understood as it is, the copyright nevertheless grants three basic rights to various members of the creative community such as authors, publishers, visual and graphic artists, photographers, architects, software developers, musicians, record and film companies and composers. Copyright allows the varied members of the creative community to control legal and economic rights to give them legal recourse against improper use of their work in case of piracy, imitation or copying.
Copyright confers legal powers on the owners to control reproduction of their work and to receive remuneration if it is used. The application of the copyright and for that matter the intellectual property is based on a combination of legislation and legal precedent which are influenced by a series of international laws, including the Berne Convention of 1886.
The Berne Convention which has been amended many times, gives writers, composers, artists the exclusive right to authorize copying of their intellectual property except where it does not conflict with the author’s legitimate interests. As there are infinite ways to make copies for individual use and as it is impossible to control every household to check infringement of the copyright the main concern of the authorities has always been directed to check the menace of mass copying.
In the recent past and immediate present, destroying of pirated music discs in Russia, raids of software pirates in China and even raids on video rental outlets in Pakistan, highlight the pressure for the eradication of improper use of copyright. The growing demand for the IPRs worldwide has been necessitated by significant increase in the flow of knowledge and information, the globalization of economic activities and the related increase in the flow of high-tech goods. The developing countries like Pakistan are under tremendous pressure to implement IPRs on one hand and higher standards of IPRs protection on the other.
There are even attempts to link the IPRs, particularly the Trade Related Intellectual Property Rights (TRIPR), with World Bank aid to the developing countries. There is a general perception in the developing countries that IPRs issue primarily pertains to the developed countries who enjoy an incomparable advantage over the developing countries.
Many also link the better IPRs protection as one of the prerequisites for economic development as it positively influences the international trade and foreign direct investment. But is there any relevance of IPRs for Pakistan which, like many other developing countries, has more pressing issues to address such as how to meet it debt obligations, increase its savings rate and boost its exports.
Software developers, video manufacturers, record companies and publishing houses in the developed world are constantly battling off-shore pirates who are now able to produce and sell near-perfect copies around the world much more easily, quickly and inexpensively— thanks to the availability of sophisticated technology. In a cost and price conscious market like Pakistan the piracy has become an acceptable fact of life both for the pirates and the users of any of many products. People have an easy access to pirated books, videos, softwares and audio cassettes.
The massive abuse of copyright and the rampant piracy is depriving the government billions of rupees in lost revenues. According to Nisar Sarwar, the representative of Motion Pictures Association of America, which protects the interest of major studios of Hollywood, the government is losing Rs 6 billion in revenues due to widespread piracy. This is happening primarily due to the failure of the enforcement of the copyright despite being a member of Berne Convention and International Copyright Order.
Video piracy is depriving the government of Rs 3 billion alone while it is losing another Rs 1.25 billion from the software industry, Rs 1 billion from audio industry, Rs 750 million from the piracy in the textile related industry and Rs 500 million account of book piracy.
Until 1994 the growing demand of the home entertainment viewership was totally met by piracy. While the bulk of the demand was for Indian movies, the English films produced by major Hollywood studios were also pirated to meet the demand of a particular market niche. It is ironic that while the wholesale piracy of Indian movies failed to attract the attention of the authorities for the reason that Pakistan enjoys no trade relations with India the piracy of English or US films also remained unchecked despite the fact that both the US and Pakistan were, and still are, the members of Berne Convention. In principle, bound by the Convention a motion picture made in the US was to be treated as if it was made in Pakistan as far as protection of copyright was concerned.
In 1994, the first licensed home entertainment company Pulse Global started its operations in Pakistan. Pulse Global has the home entertainment copyright for such Hollywood studios as Warner Brothers, Columbia Tristar, MGM, Universal, Paramount, Dream Works. Another licensee, ‘Communication City’ followed a few years later representing home entertainment copyright for other Hollywood studios including Walt Disney, 20th Century Fox, Buena Vista, Touchstone and Miramax.
Pulse Global and Communication City
Today, the home entertainment business comprise of just two of these licencees. The rest of the business, including the whole of the Indian movies and all other movies from anywhere else, still remains in the hands of pirates. According to chief executive of Pulse Global, Khalid Rangoonwala, his company which has contributed a revenue of Rs 100 million since 1994, has suffered a loss of Rs 300 million due to rampant piracy. Besides import duty, sales tax, censorboard fee Pulse Global also pays 43 per cent withholding tax on the royalty which the Hollywood studios earn from the release of a film in Pakistan, he said.
Putting the total market of the films of major Hollywood studios at Rs 3 billion annually he said that Pulse Global, which has released some 1,200 titles since 1994, is enjoying less than 2 per cent share of the market. “Today we are releasing just 18 movies a month while total monthly releases of copies have come down from 20,000 copies in 1995 to just over 12,000 at present,” he added.
Despite the loss and bleak ground realities Khalid stressed that Pulse Global was here with a hope that menace of piracy would somehow be minimized if not completely eradicated in Pakistan.
“However, while we are here to stay the gloomy outlook discourages us to invest any more money to bring more products to the country. For instance, if the situation has been encouraging we had plans to get licences to include a big number of independent studios on our list, dub movies into the national language Urdu which costs Rs 100,000 for a single film. In addition, we would have thought to provide a wider viewing choice to the people to release movies from origin, other than the US, such as French, Italian.
He said “Eradicating of video piracy is also imperative for the development of the Pakistani film industry though it remains oblivious to the damage that piracy is doing to it.” It is more interested in theatrical releases and is unmindful to the huge potential that home entertainment offers to give it a financial boost. It fails to realize that theatrical releases contribute a much smaller segment of the business compared to the much bigger home entertainment. If the local film industry shifts its attention towards tapping the video industry it will help generate substantial profit to triple annual film production from current 60-70 at present in all languages including the national language Urdu and provincial languages Punjabi and Pushto.
The executive director of Communication City, Waqar Ahmed, said that his company was releasing 10 English movies a month. Both,, he and Kahlid Rangoonwala blamed the inefficient copyright enforcement laws and small fines which do not discourage video piracy. They complained that while the two licensed home entertainment companies contribute some 70 per cent of the total revenues collected by the Pakistan Censor Board their interests remain unprotected due to lacuna in copyright enforcement laws which will be discussed later.
The main source of Censor Board is naturally the censoring of all films— local or foreign in the national language Urdu or any of regional languages or English or any other language. It charges a fee of Rs 20,000 for all theatrical releases and Rs 10,000 for censoring films for the home entertainment market. Of course, the government and the Censor Board are deprived of a substantial revenue as there are only two legitimate video companies which enjoy a negligent share of the market of films produced by major Hollywood studios.
Laser Discs/Video Compact Discs/Digital Video Discs
The government is also losing a huge revenue on account of rampant smuggling of laser discs in particular and video compact discs and digital video discs in general. According to Nisar, Karachi, Lahore and the twin cities of Rawalpindi/Islamabad house some 75 LDs, VCDs and DVDs rental outlets.
A survey, conducted by Nisar, shows that each outlet keeps an average stock of some 3,000. With an average price of Rs 2,500 each outlet carries an stock worth Rs 7.5 million. The total stocks kept by the 75 outlets comes to an staggering Rs 562.5 million, at any given time.
The average over-night rental for a LD film is a minimum Rs 80 and each outlet rents out an average of 250 LDs per day earning Rs 20,000 a day or Rs 7.2 million a year. The aggregate earnings of these 75 outlets add up to Rs 540 million per annum.
Since the business is illegitimate, the outlets pay no income, sales tax or excise duty besides keeping themselves out of customs duty and the fee to the Censor Board. The massive earnings remain totally tax-free at the expense of the exchequer. It also deprives much more as the LDs, VCDs and DVDs which are smuggled into the country are later pirated and rented in the market. This indeed is an staggering loss to the exchequer.
The absence of an effective policy or law the number of cable networks have mushroomed throughout the country. With an average connections of 8,000, each cable operator collects an average non-refundable connection charges of Rs 2,500 from each client. He also charges an average Rs 250 as monthly subscription charges. He thus not only earns Rs 20 million in non-refundable charges (Rs 2,500 x 80,000 connections) but also another Rs 2 million each month from the subscription fee (Rs 250 x 80,000) or Rs 24 million a year.
Although, the business is illegitimate but still it floods tens of thousands of houses in the country with uncensored and even obscene films/programmes.
Local Film Industry
However, Iqbal Akhtar a well-known director of Pakistani film industry said that while there was a silent understanding between the local producer that they would not make pirate copies of Pakistani films the home entertainment market offers only a small return on local films.
Iqbal who has directed such box-office films like, Phool Mere Gulshan Ka, Nadaan, Koshish, Jab Jab Phool Khiley, said that producers and directors pay sole attention to theatrical releases because even a film which is half successful means at least the return on the investment. Anything better earns profit for the financier which in the case of Pakistan is almost always the producer itself. However, the industry does not view video releases as a financial boost to worry about. Video releases earns a small Rs 200,000-300,000 for a local film maker making it unattractive for the film industry, he added.
Nisar Sarwar, who also heads the anti-piracy operations on behalf of major Hollywood studios, said that one-third of the price of every video cassette produced and sold legally includes a tax of 30 per cent. For instance a video priced at Rs 375 includes a tax of Rs 110.
There are over 40,000 video rental outlets in the country. As Pulse Global and Communication City are releasing an average of 30 new films a month even if an outlet buys a minimum of one copy the two should be selling 1.2 million copies per month. In reality the total monthly sales of Pulse Global is just over 12,000 copies. “There is a potential to earn a revenue of Rs 120 million a month (Rs 1.44 billion a year if the piracy of the films of Hollywood studios is stopped,” he observed. As the share of major Hollywood studios represented by Motion Pictures Association of America is 7-8 per cent of the total home entertainment industry of which only about 3 per cent is collectively share by the two legitimate players the potential of generating immense revenue from thus untaxed industry is immense.
With the entrance of Pulse Global, an increase in anti-piracy raids was seen during last five years. For the first time in 1995, 117 cases were registered against video pirates. Till June 30, a total of 2,020 raids were conducted which culminated in registration of 1,660 cases nationwide, the majority of them in Karachi. About 25 per cent or 417 cases none of which were fined over Rs 15,000 as against the maximum fine of upto Rs 100,000.
In most cases the convicted persons were left off with a slap on the wrist— Out of 356 convictions decided, 1,402 cases were registered till November 1998, only four were fined Rs 15,000 each — 124 were fined Rs 300 each ; 169 were fined Rs 1,000 each; 33 were fined Rs 2,000 each; 26 were fined Rs 3,000 each and three were fined Rs 5,000 each.
However, the piracy which showed signs of slowing down, picked up once again and this year primarily, what Nisar said, were lenient fines. According to law, a first violation is punishable by a maximum fine of Rs 100,000 and/or an imprisonment of a certain period. The punishment for the second and a third offence is punishable by a fine of Rs 200,000 and/or three year imprisonment.
Nisar said that until the law is changed to include a minimum fine of Rs 50,000 the illegitimate trade will keep on hurting the industry and depriving the government to exploit the vast revenue potential which thus remains untapped for the benefit of unscrupulous elements.
Nisar, perhaps, operates the only anti-piracy company in the country. He told that he had contacts with many multinational and national companies for protecting their copyrights.
I have contacts with the Oxford University Press, Microsoft and many consumer goods companies such as ICI Chemicals, manufacturers of toffee, tea and supari and Candyland.
He said that the Anti-Piracy Operations was launched in 1996 and today it has some 15 clients nationwide. The modus operandi is like this— once a contract is concluded, the company obtains the power of attorney from its client to file any police and legal complaint, to allow it to raid premises suspected of being involved in either piracy, adulteration or infringement of copyright or intellectual property rights violations.
The adulteration and counterfeit cases are registered under the copyright act while piracy-related cases evoke the infringement of IPRs. He told PAGE that since 1997 he conducted many raids resulting in the registration of some 200 cases on behalf of his clients of which 80 have been decided.
M/s US Publishers has the copyright to publish Jamal’s Yellow Pages of Pakistan which is in its 17th year of publication. It also publishes the directory on CD Rom, bi-monthly Pakistan BIG and Internets Website.
It is only registered user and the only copyright holder of Walking Fingers Logo from the US company. The company is also worried about infringement of its copyright and feels that the rampant piracy hurts the genuine publishers like itself.
Anis Ahmad, the chairman of the company, showed PAGE the exact copy of the Yellow Pages, minus cosmetic changes such as listing of phone numbers under the name. Ironically, he said, that the violator is one of the advertisers who bought the Yellow Pages on the compact disc and later used the same including the typographical and spelling mistakes to publish its own directory in two hard-cover spreads.
He expressed concerns that despite binding international laws the non-implementation of the copyright act hurts the genuine copyright holders not as much in sales but in advertising revenue. As taking legal recourse is not only costly but also full of risks, he said and added, his company feels that the qualitative advantage which it enjoys over unscrupulous elements copy the information without even updating it would not be able to make a dent it its market share.
Graphic Designing, Advertisement, Photography
The art director of a well-known advertising agency, who asked PAGE not to mention his name, said that strict implementation of IPRs in a developing economy like Pakistan would hurt economic activities at all level.
He said that copying of graphic designs, photographs, ideas and even texts are used by the advertising agencies in Pakistan with full approval of clients including national and multinational companies.
The famous Khori Garden of Karachi is flooded with books of all types to lend a big helping hand to the advertisers to copy illustrations, photographs, graphic designs. The companies not only pressurize the advertising companies to use foreign material because it saves them costs but also as the quality of the these materials in the foreign publications is much superior.
In addition, the majority of these magazines whose specific contents range from flowers, decoration, food, interior designing, fashion, jewellery, cosmetics and all consumer goods under the sun are available at less than 5 per cent of their actual prices which runs in thousands of rupees.
For instance, he said, the costs of printing a brochure for a client increases sharply if they have to hire a professional photographer plus the expenses of the model; arranging the transportation and dresses for the models. All this costs hundreds of thousands of rupees.
On the other hand copying photographs from a foreign magazine costs much lesser to reduce the production cost for a brochure to just thousands of rupees. The expensive arrangement does not suit any Third-World country including Pakistan.
In addition, there is usually a time-constraint for the production of a brochure. The time-pressed clients prefer to copy the material from the foreign publications which not only help them save big money but also to have a brochure published in time to meet a specific need.
In addition, the quality of material in foreign publications are far superior than that can be produced within the country even after huge costs.
He said that for a country like Pakistan the strict implementation of IPRs will result in slowing down the economy at all levels. For instance, piracy helps people buy comparatively inexpensive pirated books on such professional topics as engineering, medical, business management and computer. As compared to new foreign books which cost anywhere, ranging from Rs 5,000 to Rs 20,000, the pirated versions of the same are available for as low as 10 per cent of the actual price.
In addition, almost the entire software programmes, particularly Macintosh, are pirated. An original Macintosh programme costs just a little less than the computer itself. What kind of impact the strict implementation of the copyright would have on the country ‘needs no explanation’.
However, one of the problems that has surfaced to the chagrin of national and multinational companies of repute is that as all the advertisers and graphic designers are copying from the same materials there is a real chance of duplicacy. He said that many multinational companies have been embarrassed when a certain pictures of a graphic used by them was also used by a small unknown company. The appearance of same picture on the products of two different companies has also humiliated many advertisers, he added.
Being a signatory of Berne Convention, The International Copyright Order and the Intellectual Property Rights, Pakistan, is under immense pressure to enforce a strict IRPs regime by January 1 next year.
In theory, however, the highly unregulated market in Pakistan is flooded with piracy, counterfeit and massive infringement of copyright just five months away from the deadline. The financial constraints, the time factor and the quality at the least possible expense is the major cause of copyright infringement in Pakistan.
The rampant piracy in the home entertainment industry, book publication and advertising industry is depriving the government billions of rupees in revenue which can be collected by enforcing strict copyright protection. On the other hand the availability of pirated books provide a chance to many to afford to buy books of professional topics which are not printed in the country.
In theory enforcing stricter IPRs and copyright protection is imperative towards the much needed documentation of the economy to help the government expand its revenue base. In practice, however, the ground realities pose an immense challenge for the government to eradicate piracy to a comfortable level.
The Central Board of Revenue (CBR), the main tax collection agency, can play an important role to develop policies to bring the unscrupulous trade into the tax net. It also invites the special priority and attention of the ministry of finance.
Educating the police, the judiciary and the trade and industry in particular and people in general to effectively enforce the IPRs and to create public awareness, is also the need of the hour.
The information revolution of 1990s has turned the world into a global village. The information today travels at the speed of sound and millions of internet users around the world are linked to the World-Wide Web in search of information, entertainment, leisure and even E-Business.
Global trade permeates all geographical borders and e-mail commerce has become a fact of life to give a new boost to the global trade. This has also necessitated the extension of copyright protection of not only the traditional rights of authors, composers, publishers but also a number of other players in the field of creation such as computer software developers and home entertainment industry.
It was in this backdrop that the World Trade Organization (WTO) initiated Intellectual Property Rights (IPRs) declaration. Many has heard of it but only a few understood what it really means except for the vague idea that it somehow protects the rights of the authors and the creators of an idea.
Copyright, represented by a circled c (©), is the exclusive legal right to print, publish, perform, film or record literary, artistic or musical material. It is the right generally secured by law to authors of literary, dramatic, musical and artistic works to authorize the publication, reproduction, performance, adaptation or translation of such works. In some countries, registration and other formalities may be required, but in others no formalities are necessary to ensure copyright.
Various international copyright agreements exist to protect an author’s works in countries other than his own. The two most important agreements are the Berne Convention and the Universal Copyright Convention. Most countries, including Pakistan, are a signatory to one of these conventions and some are party to both. In addition to Berne Convention Pakistan is also a signatory to The International Copyright Order.
Trademark, usually denoted by TM, is an extension of the copyright with the similar objectives. It can be defined as a device or word(s) legally registered or established by use to distinguish goods of a particular manufacturer. It could also be a symbol used by an advertiser to distinguish or identify his goods.
Another extension of the copyright is the patent, an official document which confers right or title etc., especially the sole right to make, use or sell some invention or a product to an originator.
Pakistan is a signatory to World Trade Organization’s Intellectual Property Rights which requires it to honour its commitment by January 1 next year. What does the implementation of the IPRs mean?
In simple language the implementation of the IPRs means that it should make sure that there will be no abuse of the copyright in the country after January 1 next year. Just five months to go the implementation looks a Herculean task amidst a culture of massive piracy which infringes the copyright protection. With a demand of Rs 12 billion a year, Home Entertainment market is dominated by the video pirates. The similar is the case with the book publishing, computer software and music industry etc.
1995, 1996, 1997, 1998 & 1999 (June 30th)
Legal video film cassette
|Market price||Rs. 375.00|
|Govt. Tax||Rs 110.00|
|Video outlets (approx.)||35000|
|Average mpa releases||30 pm|
|If 1 outlet buys 1 tape, govt. dets|
|(110x30x35000)=||Rs 115,500,000 pm|
|And (110x30x35000x12)=||Rs 1386000000 pA|
Triple of it is going to the pirates and nothing to Govt.!!!
VCRs. VCDPs & TV SEIZURE
1995, 1996,1997,1998 & 1999 (June 30th)
Investigation and collection of evidence is done in one day.
Submission of written complaint along with the copies of power of attorney and evidence to the area sp/ssp is done the same day.
Ssp/sp takes an average of 3 days to send the complaint by post to the area asp/dsp.
Asp/dsp takes an average of 3 days to send it by post, to concerned s.H.O. For “legal action”.
S.H.O. takes an average of 2 days to appoint an “i.o” to carry out his own investigations”.
I.O, being busy man on other pressing jobs, takes an average of 7 days to call the complainant, for”verification” and statement.
I.0, if satisfied, (he seldom gets satisfied easily) conducts the raid within a week.
Case registered by raiding officer (io).
Accused arrested, list of seizures prepared and attached with fir.
Accused, with seized items presented before the judge as soon as possible (generally 24 hrs).
Accused granted bail and hearing date fixed, keeping in view judge’s other commitments (not before 4/5 weeks).
Io after completing investigations prepare final ‘echalan’/charge sheet and present to the court within 15 days.
On hearing date, the judge either awards fine, if the accused plea guilty or fixes next heartng date detailed hearings.
In detailed hearing, statements of complainant, io witnesses are recorded and cross examination carried out.
All proceedings are done in Urdu but hand written by the judge himself. No type writer, computer or steno permitted. This process takes many ‘hearings’ spread over many months as the judge is required to hear many other “heinous cases’ and also due to his other commitments as he performs (within district), dual duties; executive as well as judiciary.
On completion of hearing, judge announces his decision and written copy of decision given within a couple of weeks.
Investigation and collection of evidence.
Submission of written complaint along with the copies of power up attorney and evidence to the area sp/ssp.
Ssp/sp sends this complaint by post to the area asp/dsp.
Asp/dsp sends it by post, to the concerned s.H.O. For action.
S.H.O. details “i.O” to carry out “investigations” .
I.O, calls the complainant, for “verification” and statement.
I.O, if satisfied, lodges f.I.R and conducts the raid or conducts raid and lodge the f.I.R.
(reasons for delay)
Non submission of chalan to the court by i.O.
Non availability of judge dice to other commitments.
Non availability of i.o for present case in the court.
Non availability of witnesses for statement and cross examination .
Non availability of defending lawyers on hearing dates.
Non availability of complainant for statement due to many other such cases in various courts.
Condition of ‘hand written’ proceedings by presiding judge.
Low priority given to copyright infringement crime.”
Non availability of police force; the only enforcement tool, being under strength and over committed.
Strong connections and interest of police, politicians and administration in video market, particularly in Karachi and Lahore.
Very hostile attitude of certain militant elements within pirates towards anti piracy operations.
Frequent shuffling of police officials and administration, particularly in Karachi.
Lack of education about copyright law among enforcers and judiciary, resulting into low fines and civil injunctions as a matter of routine.
Inherent lacuna in copyright law; having no mention of mandatory minimum punishment.
Safety security of MPA staff.
Written complaint is submitted to dm, with solid proof of law violation, supported by two independent witnesses.
On receipt of complaint, the dm can:-
a. Direct police to take legal action.
b. Call both parties in his court and decide.
c. Conduct raid himself.
Criminal copmplaint to police.
Criminal complaint to District Magistrate
Civil complaint in the court of magistrate not less than class one.